Mumbai:
Mobile wallet adoption is surging in India and swiftly becoming a primary payment option, surpassing traditional methods like cash and cards.
Over the next few years, payments via mobile wallets in India are likely to surpass the Rs 531.8 trillion mark in 2028, witnessing a compound annual growth rate (CAGR) of 18.3 per cent between 2024 and 2028, according to GlobalData – a London-based leading data and analytics company.
The value of mobile wallet payments in India, as per a GlobalData report, grew at a CAGR of 72.1 per cent between 2019 and 2023 to reach Rs 202.8 trillion ($2.5 trillion) in 2023. This, it believes, is mainly due to the government’s concerted efforts to promote digital payment methods, most prominent being the mobile wallet-based instant payment solution—unified payments interface (UPI).
Last week, the Reserve Bank of India (RBI) said it will soon facilitate cash deposit facilities in banks through united payment interface (UPI), which has traditionally been a popular method for peer-to-peer (P2P) transactions, bill payments, merchant transactions, and other digital payments.
Launched in April 2016, UPI had a user base of 300 million as of October 2023, GlobalData said.
At present, UPI payments from Prepaid Payment Instruments (PPIs) can be made only by using the web or mobile app provided by the PPI issuer. RBI plans to permit the use of third-party UPI apps for making UPI payments from PPI wallets.
With the change proposed by the RBI last week, one will be able to deposit cash at Cash Deposit Machines (CDMs) using UPI, which in turn will eliminate the need for an ATM or debit card.
“The reach of mobile wallet payments is increasing rapidly, supported by the government’s push towards digital payments, widespread use of UPI-based QR code payments, coupled with high merchant acceptance. The solution offers fast, secure, convenient, and low-cost fund transfers and payments and has the potential to further disrupt the overall payment space in India,” said Shivani Gupta, senior banking and payments analyst at GlobalData.
